Questions and Answers of Economics An Introduction To Traditional

Describe the relationship of many of the large banks and the robber barons. Describe the relationship of many of the large banks and the government.
How did government regulation actually help business achieve greater profits? Which group did the Sherman Antitrust Act have the biggest effect on? Explain.
Explain how industrial warfare affected the political and social atmosphere of the time.
Explain the economic, social, and political situation most African Americans were in after being freed from slavery.
How were worker strikes usually resolved? Through negotiation or other means? Which group in society was behind this?
How did women’s roles change during this period? Why did this lead to a greater interest in equal rights?
Did African Americans receive any compensation from the government after being freed for their years of oppression? What job(s) were they forced to work in? Name two other minority groups and explain
How did the system of sharecropping inhibit the growth of technology? How did it strip the incentives from both landowners and sharecroppers?
How did entrepreneurs treat the environment? Why was there no incentive or government regulation designed to protect it?
Before the late 1800s, what would happen to the U.S. economy if Britain’s economy went into a recession?
As the U.S. economy became stronger, what part of the world did it began to exert its influence upon through colonialism?
What is the difference between competitive and corporate capitalism?
Explain the theory of consumer utility. Do you see any problems with quantifying pleasure? How does this theory relate to businesses?
Exactly how much pleasure or utility do you receive from eating a banana? A second banana?
How was the neoclassical view of the economy, i.e. small firms with no pricing power, inconsistent with reality?
Discuss what problems each of the five modifications means to a competitive market outcome.
Why was the idea of laissez-faire championed by the business elite? What special privileges did the government already give to these businessmen?
Does the present government of the United States have a laissez-faire policy?
How did the new Christian paternalistic ethic support the wealthy capitalists? How did it differ from the feudalistic version?
According to Patten, why is competition harmful?
What were economic conditions like in Veblen’s time, and how did this environment affect his view of the world?
What are the two basic clusters or behavioral traits that form the basis of Veblen’s analysis? Describe the characteristics and outcomes associated with each trait.
Explain what Veblen means by the antagonistic dichotomy of capitalism.
How did private property cause society to be divided?
Explain how productivity gives rise to exploitation. Which behavior raises productivity and why?
Explain how Veblen distinguishes “business” from “industry” and distinguishes “salesmanship” and “workmanship.” What is the result of conflict between business and industry and
How does Veblen see sabotage as a tool for business to maintain profit? What happens to efficiency and use of available productive capacity?
According to Veblen, what caused business cycles and fluctuations?
In a capitalist system, who has the legal right to enforce the laws?
How does the capitalist class “control” government and use it to perpetuate their power?
How did Veblen view capitalist imperialism? Why is expanding markets important to capitalism?
What common sentiments to gain public support for imperialism? How does this work?
Who did imperialism actually benefit? Explain.
Society views the rich with a certain level of admiration. What must the wealthy elite to do to retain this? What forces put pressure on the leisure class?
The capitalists relied on two principal means of cultural discipline and social control. Explain each. How did they result in “chronic dissatisfaction” among other things for the working class?
What is conspicuous consumption? How does it tie into the consumerism we see today?
Give examples of how output in the United States grew from 1900 to 1920.
What were some problems in the 1920s that were to later be recognized as warnings of the Great Depression?
What is the Great Depression? Why isn’t it called the Great Recession?
What were some economic impacts of the Great Depression for workers? For businesses?
Why was unemployment such a dire situation for some workers in the Great Depression?
Why was a “run on a bank” such a catastrophic event during this period of time?
What is the New Deal? What are some examples of programs initiated during the New Deal?
How do you think the programs stemming from the New Deal kept future recessions from turning into major depressions?
What are some examples of positive protections for women workers in this period? Some not so positive “protections?”
Why was the South resistant to giving women and former slaves the right to vote?
What were some examples of union activity and their outcomes? What were unions trying to achieve?
What is fascism? How did this affect certain groups of people? Give examples.
What is the reason for a country to hold colonies? How are profits generated from holding colonies?
How were the holding of colonies related to World War I?
What are the two key assumptions that neoclassical economists make about individuals? What are those assumptions used for?
What do progressive political economists claim is a key factor for individuals making decisions? Give an example.
Neoclassical economists talk about how individuals are free to spend their dollars in the market. What does this mean? What problems do progressive political economists see with this “freedom”?
What role should the government play according to neoclassical economists? According to progressive political economists?
Should the government do much spending in the economy according to neoclassical economists? Why or why not?
What types of spending does each group think the government should do in the economy?
What do the neoclassical economists have to say about taxes? How do taxes interfere with the individual?
Briefly describe the Robinson Crusoe metaphor underpinning the traditional economics perspective.
What happens if transactions are not voluntary? Can you give an example of a transaction that might not be voluntary?
What shortcomings do critical economists see in the neoclassical use of the Robinson Crusoe metaphor?
How does relative power enter into transactions between employers and employees?
What is meant by consumers “voting with their dollars”? Does everyone have an equal vote? Why or why not?
What is the difference between income and wealth?
Use Table 18.2 to describe how the distribution of income has changed in the United States over the last three decades. Has inequality increased or decreased? How do you know?Table 18.2 Distribution
Which sources of income are generated from work and which from the ownership of assets?
Personal income can be broken down into five sources or categories. What are these categories and what percentage of personal income coming from each of these sources?
How does the distribution of income in the United State compare with other countries?
What is a Gini coefficient? What would it mean if the Gini coefficient were equal to zero? What if it were equal to one?
Which countries in the world have a more equal distribution of income than the United States? Which countries have a more unequal distribution of income?
Use Table 18.5 to compute the ratio of net worth for the highest income quintile with that of the lowest income quintile. Given the other evidence in this chapter, do you suspect that this ratio has
What is the poverty threshold for a family of three in the United States in 2005? What percentage of the population have income below this level?
One percent of households own what share of total stock market value?
What has caused the increases in income and wealth inequality over the last three decades?
Which is more important in determining class: the level of income a person earns, or their relationship to the ownership of capital?
What is surplus labor? Give an example.
How is surplus labor different from necessary labor?
Explain how surplus labor relates to profits for the employer.
What is exploitation as discussed in this chapter? Does an employee need to be making low wages to be exploited?
Does exploitation depend on the absolute value of your wage or salary? Why or why not?
Why does exploitation necessarily occur in a capitalist economy? What happens to the employer if there is no surplus labor? To the employee?
Was there exploitation in the prehistoric communal society? Why or why not?
What put a limit on the rate of exploitation in a slave economy?
Assume an employee works five hours producing an amount of product equal in value to her wage and then spends another three hours producing an amount of product over and above the value of her
What does a rate of exploitation mean?
If you were an employer, would you want a high or low rate of exploitation? Explain.
Explain why employers and employees bargain or struggle over necessary and surplus labor. What are the three main sources of conflict?
If an employee’s compensation rises, what happens to necessary labor? Profits for the employer?
Even if employee compensation rises and the number of hours of work remains unchanged, why might an employer still make the same amount of profit or even increase profits?
Why can’t an employee be paid below a wage floor? Why wouldn’t an employer pay above a wage ceiling?
What factors would give employees power as they bargain with employers over compensation, hours, and effort? Explain.
When was union membership at its highest level? Why?
What has happened to union membership since the 1950s? Why?
What is meant by the term relative value? What does it measure?
What is the transformation problem?
Explain how the number of chickens could be the “price” of a pig in the simple economy.
Explain why the rate of profit and the rate of exploitation are considered to be inconsistent by some economists. As part of your explanation, define the rate of profit and the rate of exploitation.
How does the example in this chapter use the amount of labor used to produce a product to determine the relative value of one product in terms of another product, such as the value of pigs in terms
What is an alternative theory, besides the labor theory of value and the neoclassical model, used in attempting to explain exploitation?
State the key factors that make the analysis of the labor theory of value more complex in a capitalist market economy. Explain.
How do prices in an advanced economy help measure the relative value of two different commodities? How are the prices of various goods measured in an advanced market economy?

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